Strategy Falls 15% in a Month: Hold or Fold the MSTR Stock?

Strategy MSTR shares have declined 14.7% in the past month, underperforming the Zacks Computer - Software industry and the Zacks Computer and Technology sector’s returns of 0.3% and 3%, respectively.Strategy is the world’s largest bitcoin treasury company, holding 628,791 bitcoins as of July 29, 3% of all bitcoin in existence. MARA Holdings MARA, Riot Platform RIOT and Tesla TSLA are other well-known companies that hold bitcoins in their respective balance sheets. As of June 30, MARA Holdings, Riot Platforms and Tesla had 49,951, 19,273 and 11,509 bitcoins, respectively.Strategy shares have underperformed MARA Holdings, Riot Platform and Tesla over the past month. While Tesla has climbed 2.1%, MARA Holdings and Riot Platform shares have dropped 14.5% and 12.3% over the same time frame.MSTR Stock’s Performance Image Source: Zacks Investment Research Can Growing Bitcoin Holding Aid MSTR’s Prospects?Strategy benefits from the Trump administration’s announcement of the establishment of a strategic bitcoin reserve. Bitcoin, the most popular cryptocurrency, has been soaring due to increasing acceptance as a non-sovereign asset, as well as higher institutional and corporate adoption. President Trump recently issued an executive order directing the Labor Department to explore allowing 401(k) retirement plans to hold cryptocurrencies and other alternative assets, which is expected to drive retail adoption of bitcoin.Strategy now expects to achieve a bitcoin yield of 30% and $20 billion in gains, assuming the bitcoin price hits $150,000 at the end of the year. Bitcoin yield has hit 25% year to date and was 19.7% at the end of the second quarter of 2025. In dollar terms, bitcoin gain was $9.5 billion at the end of the second quarter and $13.2 billion year to date.For 2025, Strategy expects operating income of $34 billion, net income of $24 billion and earnings of $80 per share, based on a bitcoin price outlook of $150,000 at the end of the year. The company’s estimated 2025 net income of $24 billion is better than Riot Platforms’ and Mara Holdings’ net loss of $0.5 billion and $0.8 billion, respectively.Disciplined Capital Raising Bodes Well for MSTRThe company’s disciplined approach to capital raising through preferred equity offerings — Strike (STRK), Strife (STRF), STRD (Stride) and STRC (Stretch) — is a key catalyst. STRK offers an 8% dividend coupon plus MSTR exposure through conversion rights, and has an effective yield of 7.5% as of July 29. STRF offers a 10% cash dividend coupon with enhanced payment protection features and has had an effective yield of 8.7% as of July 29. Stride offers a 10% cash dividend coupon with strong collateral coverage and has an effective yield of 11.9%. Stretch offers a variable monthly cash dividend with an effective yield of 9.5% as of July 30.Strategy has issued $10.7 billion in equities and $7.6 billion in fixed income securities year to date. Among fixed income securities, the company raised $2 billion, $0.94 billion, $2.52 billion, $1.13 billion and $1.02 billion through convertible notes, STRF, STRC, STRK and STRD, respectively.Earnings Estimates Revision Trend Steady for MSTRFor third-quarter 2025, the Zacks Consensus Estimate for MSTR’s loss has been unchanged at 11 cents per share over the past 30 days. The company reported a loss of $1.56 in the year-ago quarter.MicroStrategy Incorporated Price and Consensus  MicroStrategy Incorporated price-consensus-chart | MicroStrategy Incorporated QuoteFor 2025, the Zacks Consensus Estimate for MSTR’s loss has been unchanged at $15.73 per share over the past 30 days. The company reported a loss of $6.72 per share in 2024.Here’s Why You Should Avoid MSTR Stock NowStrategy shares are overvalued, as suggested by the Value Score of F. In terms of Price/Book, Strategy is trading at 2.15X compared with Mara Holdings’ 1.24X and Riot Platforms’ 1.38X, suggesting a premium valuation.MSTR vs. MARA Valuation Image Source: Zacks Investment Research MSTR vs. RIOT Valuation Image Source: Zacks Investment Research The MSTR stock is currently trading below the 50-day moving average, indicating a bearish trend.MSTR Stock Trades Below 50-Day SMA Image Source: Zacks Investment Research Strategy benefits from its growing bitcoin holdings and increasing subscription revenues. However, challenging macroeconomic conditions and uncertainty about tariffs increase volatility in bitcoin trading. Stretched valuation is another concern.Strategy currently has a Zacks Rank #4 (Sell), which implies that investors should avoid the stock right now.You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.See our %%CTA_TEXT%% report – free today!7 Best Stocks for the Next 30 DaysWant the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Tesla, Inc. (TSLA): Free Stock Analysis Report MicroStrategy Incorporated (MSTR): Free Stock Analysis Report Marathon Digital Holdings, Inc. (MARA): Free Stock Analysis Report Riot Platforms, Inc. (RIOT): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks